Set to hold ground on relative macro stability amid USD weakness
Performance: The ringgit held firm, trading stronger-than-expected around 4.41/USD, as the USD index (DXY) sank below 100.0 amid a crisis of confidence tied to erratic US trade policies and rising concerns over Washington’s credibility.
Market Dynamics: While the ringgit gained against the USD, it continued to underperform relative to other DM currencies. Despite tariff exemptions, markets continue to price in a risk premium on US assets. The DXY sluggish rebound, even as equity markets stabilise, underscores broader scepticism over US growth prospects. Powell’s hawkish tone failed to lift the DXY. In contrast, the highly liquid EUR has benefited from portfolio rotation.
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